Reinventure backs property investment platform Brickx

Westpac-backed venture capital firm Reinventure has backed property investment platform BrickX, as part of the startup’s yet-to-close Series A round.

While the amount raised was not disclosed, Brickx CEO Anthony Millet said it comes as part of a wider strategic partnership with the investment firm, which he said is “wholeheartedly aligned” with the BrickX vision of providing a solution to the problem around housing affordability.

“Over the next 12 months Brickx plans to expand into every Australian capital city which means we’ll be able to offer our investors, which includes first home savers, general investors and self-managed super fund trustees, continuing diversity and an alternative, accessible way to gain exposure to the property market.”

Founded in 2014, Brickx is an online platform allowing individuals to invest in the residential property market one brick at a time. A property is purchased and put into a trust, then split into 10,000 units – or bricks – which can then be bought by investors through the platform.

Investors are then paid their monthly share of the net rental income, paid into their digital wallet, which can be reinvested into more bricks or withdrawn at any time. As a general rule, the team targets properties in the value range of $400,000 to $2 million, with yield of 2.5 percent to 4.5 percent, depending on location.

Launched to retail investors in September 2016, there are now 14 properties listed on the platform across Sydney, Melbourne, and Adelaide, with 7,500 members signing on.

Danny Gilligan, managing director of Reinventure, said the fund’s backing of the startup comes as the real estate industry undergoes significant change.

“There are multiple challenges in the property financing industry that fractional ownership with improved liquidity options has the potential to solve, from first home ownership to equity release,” he said.

Gilligan said Brickx represents the “first full stack solution” to property purchasing, renting, and financing in the market.

This investment is not the first for Reinventure in the real estate space, with the firm having led a $12 million round for Open Agent last year; given the link to Westpac and the bank’s interests in mortgages, the investment is an interesting one.

On this Millet said, “In solving housing investment accessibility, with particular success amongst millennials and those solving over the long term, BrickX plans to leverage internal learnings and expertise from the wider Westpac group to further advance the business.”

One potential avenue for further advancement is a rent-to-own scheme.

Kara Frederick, general partner at Reinventure, spoke to Startup Daily about the fund’s investment strategy and how it works with Westpac on an episode of the Glass Ceiling podcast.